Governance and Finance Subcommittee Recommendations
Central Oklahoma
2010
Governance/Finance Joint Subcommittee
Regional Transit Dialogue
7/7/2010 2 | P a g e
Table of Contents
Purpose and Background .................................................................................. 4
Governance/Finance Subcommittee Mission ......................................................... 4
Governance/Finance Subcommittee Members ...................................................... 4
Governance/Finance Subcommittee Staff ........................................................... 5
Fixed Guideway Study System Plan Map .............................................................. 6
Governance Models ......................................................................................... 7
County Model ............................................................................................. 7
City Model ............................................................................................... 11
District Model ........................................................................................... 15
Governance Model Recommendation ................................................................ 19
District Boundary .......................................................................................... 19
Boundary Recommendation Based on UZA .......................................................... 19
Boundary Building Blocks .............................................................................. 23
Precincts ................................................................................................. 27
Subdistricts ................................................................................................. 31
Five Subdistricts ........................................................................................ 31
Seven Subdistricts ...................................................................................... 34
Nine Subdistricts ........................................................................................ 36
Board Member Selection .................................................................................. 39
Scenario 1 ................................................................................................ 41
Scenario 2A .............................................................................................. 42
Scenario 2B .............................................................................................. 43
Financing Options ......................................................................................... 44
Costs ...................................................................................................... 44
Funding Sources ......................................................................................... 45
Sales Tax ................................................................................................. 53
Ad Valorem Tax (Property Tax) ....................................................................... 53
Fuel Taxes ............................................................................................... 55
Summary of Subcommittee Recommendations ........................................................ 56 3 | P a g e
Next Steps .................................................................................................. 57
Draft RTA Legislation ................................................................................... 57
Opinion Polling/Surveys................................................................................ 57
Prepare a Draft Funding Strategy .................................................................... 57
Other Tasks .............................................................................................. 57
Regional Transit Dialogue 2 ........................................................................... 58
4 | P a g e
Purpose and Background
This report is intended to summarize the findings of the Regional Transit Dialogue Governance/Finance Subcommittee. All findings and recommendations are intended to be advisory only and to serve as a basis for further study.
Governance/Finance Subcommittee Mission
The Governance/Finance Subcommittee formed from two of the original subcommittees of the RTD, the Governance Subcommittee and the Finance Subcommittee. After several separate meetings, the subcommittees joined because each felt that their work was interdependent. The joint subcommittee’s mission was to explore and recommend the structure and function of the proposed regional transit authority’s governing body, and to research and study possible funding mechanisms and their viability.
Governance/Finance Subcommittee Members
The Governance/Finance Subcommittee was made up of elected public officials, city staff, planners, and private businesspeople.
Bill Bleakley – President, Tierra Media Group
Rick Cain – Administrator, COTPA
J. Brent Clark – Attorney, J. Brent Clark P.C.
Rod Cleveland – Commissioner, Cleveland County
Steve Commons – Assistant City Manager, City of Edmond
Doug Cubberly – Councilmember, City of Norman
Jay Hannah – Executive VP—Financial Services, BancFirst
Terry Hawkins – VP/Director, Phillips Murrah P.C.
Guy Henson, Co-Chair – City Manager, City of Midwest City
Jane Jenkins – President, Downtown OKC Inc.
Willa Johnson – Commissioner, Oklahoma County
Bob Kemper – Kemper Consulting Group 5 | P a g e
Dick Lee – Board of Directors Vice Chairman, COTPA
Turner Mann– Councilmember, City of Midwest City
Bill Nations – Representative, Oklahoma House of Representatives
Meg Salyer – Councilmember, City of Oklahoma City
Dean Schirf – Consultant/Independent Contractor, Greater Oklahoma City Chamber of Commerce
Tom Sherman– President Elect, Norman Chamber of Commerce
Russell Smith, Co-Chair – Mayor (former), City of Midwest City
Michael Sokoff – Director of Transportation, University of Central Oklahoma
Mark VanLandingham – VP of Government Relations, Greater Oklahoma City Chamber of Commerce
Mark Williams – Area Manager—External Affairs, AT&T Oklahoma
Governance/Finance Subcommittee Staff
Kara Chiodo – Transportation Planner, ACOG
Meredith Williams – Transportation Planner, ACOG 6 | P a g e
Fixed Guideway Study System Plan Map
The System Plan Map was developed in 2005 as part of the Fixed Guideway Study, identifying transportation solutions for the Oklahoma City Metropolitan Area. The System Plan Map illustrates the study’s final recommendations for commuter rail, modern streetcar, bus rapid transit, and enhanced bus alignments. The Governance/Finance Subcommittee utilized the System Plan Map as the basis for full buildout of the transit system that a future regional transit authority would manage. The map is only meant to demonstrate potential transit corridors and alignments. 7 | P a g e
Governance Models
The subcommittee explored three governance models: the county model, the city model, and the district model.
County Model
In the county model, the boundary of the regional transit authority is set along county lines. The initial vote to join the authority takes place at the county level. If the majority of voters in a county proposed for inclusion in the authority vote yes, the whole county becomes part of the authority. If the majority of voters in a county proposed for inclusion in the authority vote no, the whole county is excluded from the authority. Furthermore, any tax that would be collected to fund the RTA would be collected at the county level.
Advantages:
• County-wide elections are easy to administer
• Boundaries are politically recognized
• Taxing (sales or property) would be easy to administer
Disadvantages:
• Rural populations (both cities and unincorporated areas) that may never receive transit services are included in the boundary. These rural communities might not be in favor of an RTA because the costs might outweigh the benefits.
• Collecting a dedicated sales tax at a county-level would require state legislative change for Oklahoma County.
• Counties may not want to give up a dedicated portion of their taxing power.
Scenario 1:
The boundary includes Oklahoma and Cleveland Counties. This boundary would encompass the commuter rail lines and most of the bus rapid transit (BRT) proposed in the Fixed Guideway Study. The population included in the boundary is 938,000.
Scenario 2:
The boundary includes Oklahoma, Cleveland, and Canadian Counties. The inclusion of Canadian County allows for the entire BRT system to be built. When Canadian County is included, the boundary’s population is 1,041,000.
Scenario 3:
This boundary is a large 6-county area including Oklahoma, Cleveland, Canadian, Logan, Grady, and McClain counties. The population included in these counties is 1,160,000.
These scenarios are simply examples of the county model—any combination of counties could ultimately be used in a county model. 8 | P a g e
9 | P a g e
10 | P a g e
11 | P a g e
City Model
In the city model, the boundary of the regional transit authority is set along city lines. The initial vote to join the authority takes place at the city level. If the majority of voters in a city proposed for inclusion in the authority vote yes, the whole city becomes part of the authority. If the majority of voters in a city proposed for inclusion in the authority vote no, the whole city is excluded from the authority. Any taxes collected to fund the operation of the RTA would be collected according to city boundaries.
Advantages:
• City-wide elections are easy to administer
• Boundaries are politically recognized
• Taxing (sales or property) would be easy to administer
• A more equitable approach? Cities that do not want to participate in the RTA would have the opportunity to “opt out.” Transit could still pass through the city, just not stop there.
• A more accurate representation of areas that would receive service than the county model.
Disadvantages:
• Cities may be reluctant to give up a portion of their taxing power.
• Difficult to project future revenues and implement a system plan without knowing which cities will commit to the system.
• If there are holes (cities which opt out of the system that are surrounded by cities in the system), then service may be compromised for the entire region.
Scenario 1:
The boundary includes the six most populous cities in the area: Oklahoma City, Norman, Edmond, Moore, Del City, and Midwest City. These cities would all be served by the proposed commuter rail lines reflected in the Fixed Guideway Study System Plan Map. The population of these cities is 861,000.
Scenario 2:
In scenario two, the boundary includes all cities proposed to receive service from the full buildout of the Fixed Guideway Study. The full buildout includes rail, BRT, and enhanced bus services. The population of these cities is 965,000.
Scenario 3:
This boundary includes all the cities in the OCARTS area. The population of these cities is 1,006,000.
These scenarios are simply examples of the city model—any combination of cities could be selected for a city model. 12 | P a g e
13 | P a g e
14 | P a g e
15 | P a g e
District Model
In the district model, the boundary of the regional transit authority does not have to follow any pre-existing legal boundaries. Parts of the boundary may coincide with city or county limits, but other parts of the boundary may not—much like a school district. The initial vote to join the authority takes place on the proposed district level. If the majority of voters in the proposed district vote yes, the authority is created. If the majority of voters in the proposed district vote no, the authority is not created. Any taxes collected to fund the operation of the RTA would be collected according to the district’s boundaries.
Advantages:
• Boundary line is flexible and thus the RTA boundary can be drawn to include the areas that will most likely receive transit service
• May be the most favorably accepted if the boundary corresponds to population densities and areas best served by transit
• Since the vote is “all or nothing,” there will be no holes and it will be easier to forecast future revenues
Disadvantages:
• Elections may be more challenging to administer
• Boundaries are not already politically recognized
• Difficult to collect taxes in area that may not coincide with recognized boundaries
• Collecting a dedicated tax at the district level would require state legislative change to create the district and give it taxing authority.
Scenario 1:
The district boundary is drawn approximately five miles away from the commuter rail lines proposed by the Fixed Guideway Study. Five miles is a representation of the distance that a commuter might drive to a station or park-and-ride lot to use the service. The population represented in this boundary is 771,000 (based on 2000 census numbers).
Scenario 2:
In scenario two, the district boundary is drawn in approximately the same location as the Urbanized Areas (a U.S. Census designation) in the Central Oklahoma region. This boundary represents the most densely populated areas of the region. All of the proposed commuter rail and BRT lines reflected in the Fixed Guideway Study System Plan lie within this area. The population included in this boundary is 845,000 (based on 2007 estimates).
Scenario 3:
This district boundary is drawn to coincide with the OCARTS boundary (the boundary in which ACOG performs regional transportation planning). The population in the OCARTS area is 1,046,000 (based on 2007 estimates).
These scenarios are simply examples of the district model—any boundary line could be selected for a district model. 16 | P a g e
17 | P a g e
18 | P a g e
19 | P a g e
Governance Model Recommendation
The RTA should follow a district model.
Consensus of the Subcommittee was that the district model provided the most flexibility to create a boundary that would encompass the areas in which service was expected to be provided based on the Fixed Guideway Study System Plan, and not extend into areas which were not likely to receive service or benefits. Additionally, because the initial vote to create the authority is an “all or nothing” vote, there is no danger of “holes” in the RTA boundary using the district model.
District Boundary
After the recommendation that the RTA should follow a district model, the next step in the process was to determine the conceptual boundary location. Several examples of what a district boundary could look like were shown in the previous section. Ultimately, the consensus was that the RTA district should be based on the smoothed Urban Area boundary, which is based on the U.S. Census defined Oklahoma City and Norman Urbanized Area (UZA) boundaries.
Boundary Recommendation Based on UZA
The subcommittee wanted to form a district that included areas that would be likely to receive transit service. The boundary should be large enough to generate the needed tax base but should not include areas that would not be likely to receive transit benefits and therefore would not likely support the creation of the RTA.
The UZA is a statistical geographic area designated by the U.S. Census Bureau, consisting of a central core and adjacent densely settled territory that together contain at least 50,000 people, generally with an overall population density of at least 1,000 people per square mile. In Central Oklahoma, there are two designated UZAs (one identified with Oklahoma City and one with Norman). By combining the two UZAs, the RTA boundary is able to capture the areas with highest densities of population and employment.
The following map shows a boundary that combines the UZA boundaries associated with the Oklahoma City and Norman UZAs, and then smoothing the edges. Federal law allows metropolitan planning organizations and state departments of transportation to cooperatively smooth the census-designated UZAs to create more logical distinctions between urban and rural areas. The second and third maps show how this boundary captures the areas of highest population density and highest employment density in Central Oklahoma. 20 | P a g e
21 | P a g e
22 | P a g e
23 | P a g e
Boundary Building Blocks
The subcommittee sought guidance from the Oklahoma Tax Commission in order to determine if using the UZA as a district boundary would be feasible for tax collection purposes. The Tax Commission representative recommended using existing political boundaries (i.e. precincts, school districts, or State House/Senate districts) as building blocks for the district boundary. By doing this, the tax collection process for any taxes eventually levied by the RTA would be much simpler, and as an additional benefit, the initial vote to create the RTA would be simpler and easier for the public to understand if their residences were inside or outside the boundary line.
Selected building blocks could be combined to create an area similar in shape to the UZA. The subcommittee first investigated State House districts and State Senate districts as building blocks, but found that they were much too large, especially those on the outer edges of the UZA. The State Senate districts had a similar problem.
Next, the subcommittee investigated school districts, but because of their size, the situation was similar to that of the House and Senate districts.
The subcommittee ultimately decided to use local precincts, since they are much smaller in size than the other building blocks considered. 24 | P a g e
25 | P a g e
26 | P a g e
27 | P a g e
Precincts
The following map shows how precinct building blocks, in blue, were combined to make a shape approximating the UZA boundary line. While the shapes of the precincts forced the overall shape to extend outside the line in places, the decision was also made to not “fill in” the line with precincts in several places, namely the easternmost portion of the area, corresponding roughly to Harrah, and the southernmost portion of the area, corresponding roughly to Noble. These portions at the very fringes of the UZA were left out of the new precinct-based boundary, as they were very unlikely to be served by transit in the foreseeable future.
In the second map, the green line represents the new precinct-based boundary, and shows more clearly how this corresponds to city limits.
The third map shows how the precinct-based boundary encloses nearly all of the region’s current commercial land. This is relevant because if a sales tax is used as a financing mechanism, most of the properties generating sales tax are inside the boundary and would thus contribute revenue for the RTA. 28 | P a g e
29 | P a g e
30 | P a g e
31 | P a g e
Subdistricts
The subcommittee felt that there should be a small, manageable number of subdistricts. Large boards can be cumbersome and weigh down progress. Also, in order to prevent ties, there would need to be an odd number of subdistricts. Furthermore, the subdistricts need to be equal in population in order to insure equitable board representation. The committee investigated scenarios where the RTA district was broken into five, seven, or nine subdistricts.
Five Subdistricts
In the five-subdistrict scenarios, each subdistrict would have a population of approximately 173,000 (one-fifth of the district’s total population).
In the first example, there are distinct north, east, and south subdistricts, with the western portion of the region being split into a northwest subdistrict and a southwest subdistrict.
The second example has north, south, east, and west subdistricts, with an additional central subdistrict. 32 | P a g e
33 | P a g e
34 | P a g e
Seven Subdistricts
In the seven-subdistrict scenario, each subdistrict would have a population of approximately 124,000 (one-seventh of the district’s total population).
The example has north, south, east, and west subdistricts, as well as three central subdistricts.
35 | P a g e
36 | P a g e
Nine Subdistricts
In the nine-subdistrict scenario, each subdistrict would have a population of approximately 96,000 (one-ninth of the district’s total population).
The first example has distinct north, south, east, and west subdistricts, and the central area is split into 5 more subdistricts.
The second example was created as an improvement on the first. In the second example, city limits were considered in its creation, to avoid splitting major suburban cities among different subdistricts. Ultimately, the subcommittee preferred this configuration out of all the scenarios. 37 | P a g e
38 | P a g e
39 | P a g e
Board Member Selection
The subcommittee recommended an appointed board since there can be many disadvantages of having an elected board. For example, lack of name recognition is an issue—it might be like voting for judges. Another example is that a candidate could run on an anti-transit platform with the plan to weaken the board from within.
The subcommittee created several example scenarios to illustrate how an appointment process could work. These scenarios all refer to the following map, which adds population percentage information to the preferred subdistrict scenario configuration. 40 | P a g e
41 | P a g e
Scenario 1
A nine (9) member board where the entity with the largest percentage of population within the subdistrict leads the appointment process
Each subdistrict appoints one board member. The entity with the largest percentage of population within each subdistrict will lead the appointment process for each subdistrict. The City of Moore will lead the appointment process in Subdistrict H. No one entity will have more than five (5) seats.
• The mayor of the largest local government will submit a nomination to their governing body for approval. This nomination shall be made in consultation with the other entities in the subdistrict.
• Once the largest entity’s governing body approves the nomination, resolutions of support shall be considered by the other governing bodies within the subdistrict. These resolutions must be passed within 60 days or the nomination will be deemed approved.
• If the governing body of entities representing more than 20% of the subdistrict’s population or a majority of the entities vote against the resolution, the nomination is void. The appointment process restarts and the largest entity shall put forth a new nomination.
• If a subdistrict cannot secure a nominee that satisfies all of these requirements within six months from the start of the appointment process, then the ACOG Board mediates the selection process.
Largest entities within each subdistrict:
• Oklahoma City (Subdistricts B,C,D,F, and G)
• Edmond (Subdistrict A)
• Norman (Subdistrict I)
• Midwest City (Subdistrict E)
42 | P a g e
Scenario 2A
An eleven (11) member board where the entity with the largest percentage of population within the subdistrict leads the appointment process and two (2) member-at-large seats represent the smaller entities.
Each subdistrict appoints one board member. The entity with the largest percentage of population within each subdistrict leads the appointment process. The City of Moore will lead the appointment process in Subdistrict H. No one entity will have more than five (5) seats.
• The mayor of the largest entity will submit a nomination to their governing body for approval. This nomination shall be made in consultation with the other entities in the subdistrict.
Two (2) member-at-large seats:
Two member-at-large seats will be made available for local governments that represent 5%, or more, of the district’s population but aren’t the largest entity within the subdistrict. The two entities that get to appoint these seats will be chosen by a random lottery. An entity will not be eligible to appoint a member-at-large seat again until all entities have had the opportunity to appoint a seat.
• The mayor of the entity who gets the member-at-large seat submits their nomination to their governing body for approval.
Entities with 5% or more of the district’s population:
• Mustang
• The Village
• Yukon
• Del City
• Choctaw
• Bethany
• Warr Acres
43 | P a g e
Scenario 2B
An eleven (11) member board where the entity with the largest percentage of population within the subdistrict leads the appointment process and two (2) member-at-large seats represent the smaller entities.
Each subdistrict appoints one board member. The entity with the largest percentage of population within each subdistrict leads the appointment process. No one entity will have more than six (6) seats.
• The mayor of the largest entity will submit a nomination to their governing body for approval. This nomination shall be made in consultation with the other entities in the subdistrict.
Two (2) member-at-large seats:
Two member-at-large seats will be made available for local governments that represent 5%, or more, of the district’s population. An entity will not be eligible to appoint a member-at-large seat again until all entities have had the opportunity to appoint a seat.
• The mayor of the entity who gets the member-at-large seat submits their nomination to their governing body for approval.
Entities with 5% or more of the district’s population:
• Mustang
• The Village
• Yukon
• Del City
• Choctaw
• Bethany
• Warr Acres
• Moore
• Norman
• Edmond
44 | P a g e
Financing Options
How will we pay for a regional transportation system? The financial strategy must take into account initial capital costs and yearly operating and maintenance costs. It must also take into account residents’ appetites for various types of taxation.
Costs
The following table lists capital costs for each mode identified in the Fixed Guideway Study. While these figures were computed in 2005 dollars, the costs as of 2010 are expected to be similar. Post 2005, construction costs dropped somewhat, and although they have risen again, the costs have recently returned to 2005 levels according to the consultant team that prepared the original FGS costs. There is no total dollar figure listed for the capital costs, as it is likely that the different elements will be implemented at different times. One final consideration is that $120 million dollars has been designated through MAPS3 to construct the initial alignment of the modern streetcar, so the capital revenue necessary for that mode has been secured.
The following table lists yearly operating and maintenance costs for each mode identified in the Fixed Guideway Study. These figures are in 2005 dollars. As a rough estimate, yearly operating and maintenance costs for the full system would be around $100 million in 2010 dollars.
45 | P a g e
While capital costs for constructing the system are a significant hurdle to clear, the committee decided to focus on investigating a funding strategy for yearly operating and maintenance costs. The construction of the system may use some of the same sources, either for pay-as-you-go construction, to support the sale of bonds for construction, or to pay back federal loans for construction. Competitive federal grant programs, such as the New Starts program, might also help provide some capital funding.
Funding Sources
The following table lists advantages and disadvantages of public transportation funding sources. The second table lists performance of these funding sources. 46 | P a g e
47 | P a g e
48 | P a g e
49 | P a g e
50 | P a g e
51 | P a g e
52 | P a g e
The most common funding source for operations is sales tax (see pie chart below—information is from the 2008 National Transit Database), with property tax a distant second. Of course, it is possible to simultaneously use both sales tax and property tax for a system, or some other combination of dedicated funding sources, but most transit systems use only one type of dedicated funding source. The income generated by the dedicated funding source is then combined with fares, state funds (if available), and federal funds to cover the costs of operation.
Those transit systems that do not have a dedicated funding source at their disposal usually must rely heavily on general revenue funds provided from the city budgets in the areas served. This usually means less funding is available for the transit system than if a dedicated funding source were in place. Additionally, funding from city budgets is generally less dependable than funding from a dedicated source.
Data from the National Transit Database suggests that sales taxes serve as a major revenue source among systems of all sizes and types, property tax use is concentrated among smaller systems (often municipal or county systems), and local general funds play a large role in systems serving areas with populations under a million.
53 | P a g e
Sales Tax
The subcommittee further explored the most popular dedicated funding source, sales tax. Local sales tax data from 2009 was analyzed to obtain a total figure for sales taxes collected in the proposed district boundary. Then, taking local tax rates into account, revenues for an additional 1 cent, ¾ cent, ½ cent, and ¼ cent dedicated sales tax were computed. These tax rates were chosen because sales taxes enacted for transit generally range from ¼ to 1 cent.
Ad Valorem Tax (Property Tax)
In most states, ad valorem taxes (property taxes) are the primary source of revenue for local governments. Oklahoma’s situation, however, is unique in that sales tax is a much more important source of revenue for local governments. The following graphics show how property taxes are allocated in Oklahoma County and Cleveland County. (The first graphic is for Oklahoma County.) 54 | P a g e
55 | P a g e
Because millage rates vary by location (for example, Oklahoma County’s mill rate varies from about 72 to 133), and assessed value depends on whether the property is residential or commercial, a detailed analysis of the increase in mill rate needed in the proposed district boundary to fund yearly operations was not undertaken. This type of analysis was beyond the expertise of the subcommittee, and would require extensive collaboration with the Oklahoma Tax Commission, as well as the County Assessors’ offices in Oklahoma County, Cleveland County, and Canadian County.
The subcommittee also felt that the public was far less likely to support a property tax increase than a sales tax increase. This view was supported by the results of one of the questions on ACOG’s May 2009 Encompass 2035 Survey, shown below.
Q15: What three funding sources would you most likely support to achieve the type of transportation system you would like to have in Central Oklahoma? (choose three)
• No new funding: Redistribute existing funds 56%
• Gasoline tax increase 34%
• Vehicle registration fee increase 24%
• Diesel tax increase 22%
• Sales tax increase 21%
• Fee based on how many miles you drive your car 17%
• Increase tolls on existing turnpikes 10%
• Property tax increase 8%
• Build new toll roads 8 %
• Add tolls to highways that are currently “free” 7%
In light of these local considerations, as well as the fact that property taxes are used much less frequently nationwide than sales taxes for funding transit (and when used are a hallmark of small systems), the subcommittee recommended giving property taxes a lower priority for further study than sales taxes.
Fuel Taxes
The category of fuel taxes includes both gasoline and diesel taxes. These taxes, as seen in the above data from the Encompass 2035 Survey, are a popular idea for funding transportation improvements in general. However, they are not frequently used to support operations of public transportation services in a direct manner, as noted on the pie chart in the “Funding Sources” section. These taxes are more frequently collected by the state and then distributed to transit agencies as state funds.
The State of Oklahoma currently designates $850,000 yearly to the state Public Transit Revolving Fund from gasoline tax receipts (approximately 0.3% of total receipts). A number of states have authorized local option gasoline taxes, but Oklahoma is not one of them. If 56 | P a g e
this funding source were pursued, legislation would have to be drafted to allow a local option gasoline tax in Oklahoma, or to designate more money from the existing tax to pass through the Public Transit Revolving Fund and ultimately end up with the RTA.
Even though survey results for this type of funding source were positive, the lack of popularity of fuel taxes as a funding source for public transportation, as well as the state’s history of failure with fuel tax increase proposals, may make fuel taxes an unpopular candidate for funding an RTA.
Summary of Subcommittee Recommendations
• The Regional Transit Authority (RTA) should follow a district model.
• The district boundary should be similar to that of the Census designated Urbanized Areas (UZAs).
• The district boundary should be built using precincts that best correspond to the UZA.
• The district should be divided into nine subdistricts of equal population for RTA board representation.
• The RTA board members should be appointed.
• The RTA should have a dedicated funding source to support its operations. Sales tax and property tax are the most likely candidates.
57 | P a g e
Next Steps
The Governance/Finance Subcommittee understands that the Regional Transit Dialogue represents one of the first steps in developing a Regional Transit Authority. The subcommittee recommends the continuation of this process through several tasks to be taken up in the Regional Transit Dialogue, Part 2 (RTD2).
Draft RTA Legislation
While current Oklahoma law allows for creation of a Regional Transit Authority by a group of cities, towns, and/or counties, it does not allow for a district model RTA, as recommended by the Governance-Finance subcommittee. Current law allows for financing construction and operations via sales tax, but does not allow any other taxation options to be used.
While the existing legislation may prove useful in the interim, the subcommittee recommends that more detailed and more flexible legislation for the creation and powers of an RTA be drafted and eventually incorporated into state law.
Opinion Polling/Surveys
In order to ensure success when the time comes to put the creation of a Regional Transit Authority to a vote of the people, polling and surveys should be undertaken to understand the desires and preferences of the public. For example, polling might be done to see whether voters would be more likely to support a sales tax or a property tax as a dedicated funding source.
Prepare a Draft Funding Strategy
Using the information gathered from the subcommittee’s research in Part 1 of the RTD, as well as results of public opinion polling to be done during Part 2 of the RTD, draft funding strategies can be created for both capital costs and operating costs.
Other Tasks
The subcommittee may elect to take on other tasks or research during RTD2.
58 | P a g e
Regional Transit Dialogue 2
Part 2 of the Regional Transit Dialogue is expected to begin in early 2011, depending on the completion date of Part 1 meetings and products, Steering Committee member preferences, and ACOG staff availability.

Click tabs to swap between content that is broken into logical sections.

Governance and Finance Subcommittee Recommendations
Central Oklahoma
2010
Governance/Finance Joint Subcommittee
Regional Transit Dialogue
7/7/2010 2 | P a g e
Table of Contents
Purpose and Background .................................................................................. 4
Governance/Finance Subcommittee Mission ......................................................... 4
Governance/Finance Subcommittee Members ...................................................... 4
Governance/Finance Subcommittee Staff ........................................................... 5
Fixed Guideway Study System Plan Map .............................................................. 6
Governance Models ......................................................................................... 7
County Model ............................................................................................. 7
City Model ............................................................................................... 11
District Model ........................................................................................... 15
Governance Model Recommendation ................................................................ 19
District Boundary .......................................................................................... 19
Boundary Recommendation Based on UZA .......................................................... 19
Boundary Building Blocks .............................................................................. 23
Precincts ................................................................................................. 27
Subdistricts ................................................................................................. 31
Five Subdistricts ........................................................................................ 31
Seven Subdistricts ...................................................................................... 34
Nine Subdistricts ........................................................................................ 36
Board Member Selection .................................................................................. 39
Scenario 1 ................................................................................................ 41
Scenario 2A .............................................................................................. 42
Scenario 2B .............................................................................................. 43
Financing Options ......................................................................................... 44
Costs ...................................................................................................... 44
Funding Sources ......................................................................................... 45
Sales Tax ................................................................................................. 53
Ad Valorem Tax (Property Tax) ....................................................................... 53
Fuel Taxes ............................................................................................... 55
Summary of Subcommittee Recommendations ........................................................ 56 3 | P a g e
Next Steps .................................................................................................. 57
Draft RTA Legislation ................................................................................... 57
Opinion Polling/Surveys................................................................................ 57
Prepare a Draft Funding Strategy .................................................................... 57
Other Tasks .............................................................................................. 57
Regional Transit Dialogue 2 ........................................................................... 58
4 | P a g e
Purpose and Background
This report is intended to summarize the findings of the Regional Transit Dialogue Governance/Finance Subcommittee. All findings and recommendations are intended to be advisory only and to serve as a basis for further study.
Governance/Finance Subcommittee Mission
The Governance/Finance Subcommittee formed from two of the original subcommittees of the RTD, the Governance Subcommittee and the Finance Subcommittee. After several separate meetings, the subcommittees joined because each felt that their work was interdependent. The joint subcommittee’s mission was to explore and recommend the structure and function of the proposed regional transit authority’s governing body, and to research and study possible funding mechanisms and their viability.
Governance/Finance Subcommittee Members
The Governance/Finance Subcommittee was made up of elected public officials, city staff, planners, and private businesspeople.
Bill Bleakley – President, Tierra Media Group
Rick Cain – Administrator, COTPA
J. Brent Clark – Attorney, J. Brent Clark P.C.
Rod Cleveland – Commissioner, Cleveland County
Steve Commons – Assistant City Manager, City of Edmond
Doug Cubberly – Councilmember, City of Norman
Jay Hannah – Executive VP—Financial Services, BancFirst
Terry Hawkins – VP/Director, Phillips Murrah P.C.
Guy Henson, Co-Chair – City Manager, City of Midwest City
Jane Jenkins – President, Downtown OKC Inc.
Willa Johnson – Commissioner, Oklahoma County
Bob Kemper – Kemper Consulting Group 5 | P a g e
Dick Lee – Board of Directors Vice Chairman, COTPA
Turner Mann– Councilmember, City of Midwest City
Bill Nations – Representative, Oklahoma House of Representatives
Meg Salyer – Councilmember, City of Oklahoma City
Dean Schirf – Consultant/Independent Contractor, Greater Oklahoma City Chamber of Commerce
Tom Sherman– President Elect, Norman Chamber of Commerce
Russell Smith, Co-Chair – Mayor (former), City of Midwest City
Michael Sokoff – Director of Transportation, University of Central Oklahoma
Mark VanLandingham – VP of Government Relations, Greater Oklahoma City Chamber of Commerce
Mark Williams – Area Manager—External Affairs, AT&T Oklahoma
Governance/Finance Subcommittee Staff
Kara Chiodo – Transportation Planner, ACOG
Meredith Williams – Transportation Planner, ACOG 6 | P a g e
Fixed Guideway Study System Plan Map
The System Plan Map was developed in 2005 as part of the Fixed Guideway Study, identifying transportation solutions for the Oklahoma City Metropolitan Area. The System Plan Map illustrates the study’s final recommendations for commuter rail, modern streetcar, bus rapid transit, and enhanced bus alignments. The Governance/Finance Subcommittee utilized the System Plan Map as the basis for full buildout of the transit system that a future regional transit authority would manage. The map is only meant to demonstrate potential transit corridors and alignments. 7 | P a g e
Governance Models
The subcommittee explored three governance models: the county model, the city model, and the district model.
County Model
In the county model, the boundary of the regional transit authority is set along county lines. The initial vote to join the authority takes place at the county level. If the majority of voters in a county proposed for inclusion in the authority vote yes, the whole county becomes part of the authority. If the majority of voters in a county proposed for inclusion in the authority vote no, the whole county is excluded from the authority. Furthermore, any tax that would be collected to fund the RTA would be collected at the county level.
Advantages:
• County-wide elections are easy to administer
• Boundaries are politically recognized
• Taxing (sales or property) would be easy to administer
Disadvantages:
• Rural populations (both cities and unincorporated areas) that may never receive transit services are included in the boundary. These rural communities might not be in favor of an RTA because the costs might outweigh the benefits.
• Collecting a dedicated sales tax at a county-level would require state legislative change for Oklahoma County.
• Counties may not want to give up a dedicated portion of their taxing power.
Scenario 1:
The boundary includes Oklahoma and Cleveland Counties. This boundary would encompass the commuter rail lines and most of the bus rapid transit (BRT) proposed in the Fixed Guideway Study. The population included in the boundary is 938,000.
Scenario 2:
The boundary includes Oklahoma, Cleveland, and Canadian Counties. The inclusion of Canadian County allows for the entire BRT system to be built. When Canadian County is included, the boundary’s population is 1,041,000.
Scenario 3:
This boundary is a large 6-county area including Oklahoma, Cleveland, Canadian, Logan, Grady, and McClain counties. The population included in these counties is 1,160,000.
These scenarios are simply examples of the county model—any combination of counties could ultimately be used in a county model. 8 | P a g e
9 | P a g e
10 | P a g e
11 | P a g e
City Model
In the city model, the boundary of the regional transit authority is set along city lines. The initial vote to join the authority takes place at the city level. If the majority of voters in a city proposed for inclusion in the authority vote yes, the whole city becomes part of the authority. If the majority of voters in a city proposed for inclusion in the authority vote no, the whole city is excluded from the authority. Any taxes collected to fund the operation of the RTA would be collected according to city boundaries.
Advantages:
• City-wide elections are easy to administer
• Boundaries are politically recognized
• Taxing (sales or property) would be easy to administer
• A more equitable approach? Cities that do not want to participate in the RTA would have the opportunity to “opt out.” Transit could still pass through the city, just not stop there.
• A more accurate representation of areas that would receive service than the county model.
Disadvantages:
• Cities may be reluctant to give up a portion of their taxing power.
• Difficult to project future revenues and implement a system plan without knowing which cities will commit to the system.
• If there are holes (cities which opt out of the system that are surrounded by cities in the system), then service may be compromised for the entire region.
Scenario 1:
The boundary includes the six most populous cities in the area: Oklahoma City, Norman, Edmond, Moore, Del City, and Midwest City. These cities would all be served by the proposed commuter rail lines reflected in the Fixed Guideway Study System Plan Map. The population of these cities is 861,000.
Scenario 2:
In scenario two, the boundary includes all cities proposed to receive service from the full buildout of the Fixed Guideway Study. The full buildout includes rail, BRT, and enhanced bus services. The population of these cities is 965,000.
Scenario 3:
This boundary includes all the cities in the OCARTS area. The population of these cities is 1,006,000.
These scenarios are simply examples of the city model—any combination of cities could be selected for a city model. 12 | P a g e
13 | P a g e
14 | P a g e
15 | P a g e
District Model
In the district model, the boundary of the regional transit authority does not have to follow any pre-existing legal boundaries. Parts of the boundary may coincide with city or county limits, but other parts of the boundary may not—much like a school district. The initial vote to join the authority takes place on the proposed district level. If the majority of voters in the proposed district vote yes, the authority is created. If the majority of voters in the proposed district vote no, the authority is not created. Any taxes collected to fund the operation of the RTA would be collected according to the district’s boundaries.
Advantages:
• Boundary line is flexible and thus the RTA boundary can be drawn to include the areas that will most likely receive transit service
• May be the most favorably accepted if the boundary corresponds to population densities and areas best served by transit
• Since the vote is “all or nothing,” there will be no holes and it will be easier to forecast future revenues
Disadvantages:
• Elections may be more challenging to administer
• Boundaries are not already politically recognized
• Difficult to collect taxes in area that may not coincide with recognized boundaries
• Collecting a dedicated tax at the district level would require state legislative change to create the district and give it taxing authority.
Scenario 1:
The district boundary is drawn approximately five miles away from the commuter rail lines proposed by the Fixed Guideway Study. Five miles is a representation of the distance that a commuter might drive to a station or park-and-ride lot to use the service. The population represented in this boundary is 771,000 (based on 2000 census numbers).
Scenario 2:
In scenario two, the district boundary is drawn in approximately the same location as the Urbanized Areas (a U.S. Census designation) in the Central Oklahoma region. This boundary represents the most densely populated areas of the region. All of the proposed commuter rail and BRT lines reflected in the Fixed Guideway Study System Plan lie within this area. The population included in this boundary is 845,000 (based on 2007 estimates).
Scenario 3:
This district boundary is drawn to coincide with the OCARTS boundary (the boundary in which ACOG performs regional transportation planning). The population in the OCARTS area is 1,046,000 (based on 2007 estimates).
These scenarios are simply examples of the district model—any boundary line could be selected for a district model. 16 | P a g e
17 | P a g e
18 | P a g e
19 | P a g e
Governance Model Recommendation
The RTA should follow a district model.
Consensus of the Subcommittee was that the district model provided the most flexibility to create a boundary that would encompass the areas in which service was expected to be provided based on the Fixed Guideway Study System Plan, and not extend into areas which were not likely to receive service or benefits. Additionally, because the initial vote to create the authority is an “all or nothing” vote, there is no danger of “holes” in the RTA boundary using the district model.
District Boundary
After the recommendation that the RTA should follow a district model, the next step in the process was to determine the conceptual boundary location. Several examples of what a district boundary could look like were shown in the previous section. Ultimately, the consensus was that the RTA district should be based on the smoothed Urban Area boundary, which is based on the U.S. Census defined Oklahoma City and Norman Urbanized Area (UZA) boundaries.
Boundary Recommendation Based on UZA
The subcommittee wanted to form a district that included areas that would be likely to receive transit service. The boundary should be large enough to generate the needed tax base but should not include areas that would not be likely to receive transit benefits and therefore would not likely support the creation of the RTA.
The UZA is a statistical geographic area designated by the U.S. Census Bureau, consisting of a central core and adjacent densely settled territory that together contain at least 50,000 people, generally with an overall population density of at least 1,000 people per square mile. In Central Oklahoma, there are two designated UZAs (one identified with Oklahoma City and one with Norman). By combining the two UZAs, the RTA boundary is able to capture the areas with highest densities of population and employment.
The following map shows a boundary that combines the UZA boundaries associated with the Oklahoma City and Norman UZAs, and then smoothing the edges. Federal law allows metropolitan planning organizations and state departments of transportation to cooperatively smooth the census-designated UZAs to create more logical distinctions between urban and rural areas. The second and third maps show how this boundary captures the areas of highest population density and highest employment density in Central Oklahoma. 20 | P a g e
21 | P a g e
22 | P a g e
23 | P a g e
Boundary Building Blocks
The subcommittee sought guidance from the Oklahoma Tax Commission in order to determine if using the UZA as a district boundary would be feasible for tax collection purposes. The Tax Commission representative recommended using existing political boundaries (i.e. precincts, school districts, or State House/Senate districts) as building blocks for the district boundary. By doing this, the tax collection process for any taxes eventually levied by the RTA would be much simpler, and as an additional benefit, the initial vote to create the RTA would be simpler and easier for the public to understand if their residences were inside or outside the boundary line.
Selected building blocks could be combined to create an area similar in shape to the UZA. The subcommittee first investigated State House districts and State Senate districts as building blocks, but found that they were much too large, especially those on the outer edges of the UZA. The State Senate districts had a similar problem.
Next, the subcommittee investigated school districts, but because of their size, the situation was similar to that of the House and Senate districts.
The subcommittee ultimately decided to use local precincts, since they are much smaller in size than the other building blocks considered. 24 | P a g e
25 | P a g e
26 | P a g e
27 | P a g e
Precincts
The following map shows how precinct building blocks, in blue, were combined to make a shape approximating the UZA boundary line. While the shapes of the precincts forced the overall shape to extend outside the line in places, the decision was also made to not “fill in” the line with precincts in several places, namely the easternmost portion of the area, corresponding roughly to Harrah, and the southernmost portion of the area, corresponding roughly to Noble. These portions at the very fringes of the UZA were left out of the new precinct-based boundary, as they were very unlikely to be served by transit in the foreseeable future.
In the second map, the green line represents the new precinct-based boundary, and shows more clearly how this corresponds to city limits.
The third map shows how the precinct-based boundary encloses nearly all of the region’s current commercial land. This is relevant because if a sales tax is used as a financing mechanism, most of the properties generating sales tax are inside the boundary and would thus contribute revenue for the RTA. 28 | P a g e
29 | P a g e
30 | P a g e
31 | P a g e
Subdistricts
The subcommittee felt that there should be a small, manageable number of subdistricts. Large boards can be cumbersome and weigh down progress. Also, in order to prevent ties, there would need to be an odd number of subdistricts. Furthermore, the subdistricts need to be equal in population in order to insure equitable board representation. The committee investigated scenarios where the RTA district was broken into five, seven, or nine subdistricts.
Five Subdistricts
In the five-subdistrict scenarios, each subdistrict would have a population of approximately 173,000 (one-fifth of the district’s total population).
In the first example, there are distinct north, east, and south subdistricts, with the western portion of the region being split into a northwest subdistrict and a southwest subdistrict.
The second example has north, south, east, and west subdistricts, with an additional central subdistrict. 32 | P a g e
33 | P a g e
34 | P a g e
Seven Subdistricts
In the seven-subdistrict scenario, each subdistrict would have a population of approximately 124,000 (one-seventh of the district’s total population).
The example has north, south, east, and west subdistricts, as well as three central subdistricts.
35 | P a g e
36 | P a g e
Nine Subdistricts
In the nine-subdistrict scenario, each subdistrict would have a population of approximately 96,000 (one-ninth of the district’s total population).
The first example has distinct north, south, east, and west subdistricts, and the central area is split into 5 more subdistricts.
The second example was created as an improvement on the first. In the second example, city limits were considered in its creation, to avoid splitting major suburban cities among different subdistricts. Ultimately, the subcommittee preferred this configuration out of all the scenarios. 37 | P a g e
38 | P a g e
39 | P a g e
Board Member Selection
The subcommittee recommended an appointed board since there can be many disadvantages of having an elected board. For example, lack of name recognition is an issue—it might be like voting for judges. Another example is that a candidate could run on an anti-transit platform with the plan to weaken the board from within.
The subcommittee created several example scenarios to illustrate how an appointment process could work. These scenarios all refer to the following map, which adds population percentage information to the preferred subdistrict scenario configuration. 40 | P a g e
41 | P a g e
Scenario 1
A nine (9) member board where the entity with the largest percentage of population within the subdistrict leads the appointment process
Each subdistrict appoints one board member. The entity with the largest percentage of population within each subdistrict will lead the appointment process for each subdistrict. The City of Moore will lead the appointment process in Subdistrict H. No one entity will have more than five (5) seats.
• The mayor of the largest local government will submit a nomination to their governing body for approval. This nomination shall be made in consultation with the other entities in the subdistrict.
• Once the largest entity’s governing body approves the nomination, resolutions of support shall be considered by the other governing bodies within the subdistrict. These resolutions must be passed within 60 days or the nomination will be deemed approved.
• If the governing body of entities representing more than 20% of the subdistrict’s population or a majority of the entities vote against the resolution, the nomination is void. The appointment process restarts and the largest entity shall put forth a new nomination.
• If a subdistrict cannot secure a nominee that satisfies all of these requirements within six months from the start of the appointment process, then the ACOG Board mediates the selection process.
Largest entities within each subdistrict:
• Oklahoma City (Subdistricts B,C,D,F, and G)
• Edmond (Subdistrict A)
• Norman (Subdistrict I)
• Midwest City (Subdistrict E)
42 | P a g e
Scenario 2A
An eleven (11) member board where the entity with the largest percentage of population within the subdistrict leads the appointment process and two (2) member-at-large seats represent the smaller entities.
Each subdistrict appoints one board member. The entity with the largest percentage of population within each subdistrict leads the appointment process. The City of Moore will lead the appointment process in Subdistrict H. No one entity will have more than five (5) seats.
• The mayor of the largest entity will submit a nomination to their governing body for approval. This nomination shall be made in consultation with the other entities in the subdistrict.
Two (2) member-at-large seats:
Two member-at-large seats will be made available for local governments that represent 5%, or more, of the district’s population but aren’t the largest entity within the subdistrict. The two entities that get to appoint these seats will be chosen by a random lottery. An entity will not be eligible to appoint a member-at-large seat again until all entities have had the opportunity to appoint a seat.
• The mayor of the entity who gets the member-at-large seat submits their nomination to their governing body for approval.
Entities with 5% or more of the district’s population:
• Mustang
• The Village
• Yukon
• Del City
• Choctaw
• Bethany
• Warr Acres
43 | P a g e
Scenario 2B
An eleven (11) member board where the entity with the largest percentage of population within the subdistrict leads the appointment process and two (2) member-at-large seats represent the smaller entities.
Each subdistrict appoints one board member. The entity with the largest percentage of population within each subdistrict leads the appointment process. No one entity will have more than six (6) seats.
• The mayor of the largest entity will submit a nomination to their governing body for approval. This nomination shall be made in consultation with the other entities in the subdistrict.
Two (2) member-at-large seats:
Two member-at-large seats will be made available for local governments that represent 5%, or more, of the district’s population. An entity will not be eligible to appoint a member-at-large seat again until all entities have had the opportunity to appoint a seat.
• The mayor of the entity who gets the member-at-large seat submits their nomination to their governing body for approval.
Entities with 5% or more of the district’s population:
• Mustang
• The Village
• Yukon
• Del City
• Choctaw
• Bethany
• Warr Acres
• Moore
• Norman
• Edmond
44 | P a g e
Financing Options
How will we pay for a regional transportation system? The financial strategy must take into account initial capital costs and yearly operating and maintenance costs. It must also take into account residents’ appetites for various types of taxation.
Costs
The following table lists capital costs for each mode identified in the Fixed Guideway Study. While these figures were computed in 2005 dollars, the costs as of 2010 are expected to be similar. Post 2005, construction costs dropped somewhat, and although they have risen again, the costs have recently returned to 2005 levels according to the consultant team that prepared the original FGS costs. There is no total dollar figure listed for the capital costs, as it is likely that the different elements will be implemented at different times. One final consideration is that $120 million dollars has been designated through MAPS3 to construct the initial alignment of the modern streetcar, so the capital revenue necessary for that mode has been secured.
The following table lists yearly operating and maintenance costs for each mode identified in the Fixed Guideway Study. These figures are in 2005 dollars. As a rough estimate, yearly operating and maintenance costs for the full system would be around $100 million in 2010 dollars.
45 | P a g e
While capital costs for constructing the system are a significant hurdle to clear, the committee decided to focus on investigating a funding strategy for yearly operating and maintenance costs. The construction of the system may use some of the same sources, either for pay-as-you-go construction, to support the sale of bonds for construction, or to pay back federal loans for construction. Competitive federal grant programs, such as the New Starts program, might also help provide some capital funding.
Funding Sources
The following table lists advantages and disadvantages of public transportation funding sources. The second table lists performance of these funding sources. 46 | P a g e
47 | P a g e
48 | P a g e
49 | P a g e
50 | P a g e
51 | P a g e
52 | P a g e
The most common funding source for operations is sales tax (see pie chart below—information is from the 2008 National Transit Database), with property tax a distant second. Of course, it is possible to simultaneously use both sales tax and property tax for a system, or some other combination of dedicated funding sources, but most transit systems use only one type of dedicated funding source. The income generated by the dedicated funding source is then combined with fares, state funds (if available), and federal funds to cover the costs of operation.
Those transit systems that do not have a dedicated funding source at their disposal usually must rely heavily on general revenue funds provided from the city budgets in the areas served. This usually means less funding is available for the transit system than if a dedicated funding source were in place. Additionally, funding from city budgets is generally less dependable than funding from a dedicated source.
Data from the National Transit Database suggests that sales taxes serve as a major revenue source among systems of all sizes and types, property tax use is concentrated among smaller systems (often municipal or county systems), and local general funds play a large role in systems serving areas with populations under a million.
53 | P a g e
Sales Tax
The subcommittee further explored the most popular dedicated funding source, sales tax. Local sales tax data from 2009 was analyzed to obtain a total figure for sales taxes collected in the proposed district boundary. Then, taking local tax rates into account, revenues for an additional 1 cent, ¾ cent, ½ cent, and ¼ cent dedicated sales tax were computed. These tax rates were chosen because sales taxes enacted for transit generally range from ¼ to 1 cent.
Ad Valorem Tax (Property Tax)
In most states, ad valorem taxes (property taxes) are the primary source of revenue for local governments. Oklahoma’s situation, however, is unique in that sales tax is a much more important source of revenue for local governments. The following graphics show how property taxes are allocated in Oklahoma County and Cleveland County. (The first graphic is for Oklahoma County.) 54 | P a g e
55 | P a g e
Because millage rates vary by location (for example, Oklahoma County’s mill rate varies from about 72 to 133), and assessed value depends on whether the property is residential or commercial, a detailed analysis of the increase in mill rate needed in the proposed district boundary to fund yearly operations was not undertaken. This type of analysis was beyond the expertise of the subcommittee, and would require extensive collaboration with the Oklahoma Tax Commission, as well as the County Assessors’ offices in Oklahoma County, Cleveland County, and Canadian County.
The subcommittee also felt that the public was far less likely to support a property tax increase than a sales tax increase. This view was supported by the results of one of the questions on ACOG’s May 2009 Encompass 2035 Survey, shown below.
Q15: What three funding sources would you most likely support to achieve the type of transportation system you would like to have in Central Oklahoma? (choose three)
• No new funding: Redistribute existing funds 56%
• Gasoline tax increase 34%
• Vehicle registration fee increase 24%
• Diesel tax increase 22%
• Sales tax increase 21%
• Fee based on how many miles you drive your car 17%
• Increase tolls on existing turnpikes 10%
• Property tax increase 8%
• Build new toll roads 8 %
• Add tolls to highways that are currently “free” 7%
In light of these local considerations, as well as the fact that property taxes are used much less frequently nationwide than sales taxes for funding transit (and when used are a hallmark of small systems), the subcommittee recommended giving property taxes a lower priority for further study than sales taxes.
Fuel Taxes
The category of fuel taxes includes both gasoline and diesel taxes. These taxes, as seen in the above data from the Encompass 2035 Survey, are a popular idea for funding transportation improvements in general. However, they are not frequently used to support operations of public transportation services in a direct manner, as noted on the pie chart in the “Funding Sources” section. These taxes are more frequently collected by the state and then distributed to transit agencies as state funds.
The State of Oklahoma currently designates $850,000 yearly to the state Public Transit Revolving Fund from gasoline tax receipts (approximately 0.3% of total receipts). A number of states have authorized local option gasoline taxes, but Oklahoma is not one of them. If 56 | P a g e
this funding source were pursued, legislation would have to be drafted to allow a local option gasoline tax in Oklahoma, or to designate more money from the existing tax to pass through the Public Transit Revolving Fund and ultimately end up with the RTA.
Even though survey results for this type of funding source were positive, the lack of popularity of fuel taxes as a funding source for public transportation, as well as the state’s history of failure with fuel tax increase proposals, may make fuel taxes an unpopular candidate for funding an RTA.
Summary of Subcommittee Recommendations
• The Regional Transit Authority (RTA) should follow a district model.
• The district boundary should be similar to that of the Census designated Urbanized Areas (UZAs).
• The district boundary should be built using precincts that best correspond to the UZA.
• The district should be divided into nine subdistricts of equal population for RTA board representation.
• The RTA board members should be appointed.
• The RTA should have a dedicated funding source to support its operations. Sales tax and property tax are the most likely candidates.
57 | P a g e
Next Steps
The Governance/Finance Subcommittee understands that the Regional Transit Dialogue represents one of the first steps in developing a Regional Transit Authority. The subcommittee recommends the continuation of this process through several tasks to be taken up in the Regional Transit Dialogue, Part 2 (RTD2).
Draft RTA Legislation
While current Oklahoma law allows for creation of a Regional Transit Authority by a group of cities, towns, and/or counties, it does not allow for a district model RTA, as recommended by the Governance-Finance subcommittee. Current law allows for financing construction and operations via sales tax, but does not allow any other taxation options to be used.
While the existing legislation may prove useful in the interim, the subcommittee recommends that more detailed and more flexible legislation for the creation and powers of an RTA be drafted and eventually incorporated into state law.
Opinion Polling/Surveys
In order to ensure success when the time comes to put the creation of a Regional Transit Authority to a vote of the people, polling and surveys should be undertaken to understand the desires and preferences of the public. For example, polling might be done to see whether voters would be more likely to support a sales tax or a property tax as a dedicated funding source.
Prepare a Draft Funding Strategy
Using the information gathered from the subcommittee’s research in Part 1 of the RTD, as well as results of public opinion polling to be done during Part 2 of the RTD, draft funding strategies can be created for both capital costs and operating costs.
Other Tasks
The subcommittee may elect to take on other tasks or research during RTD2.
58 | P a g e
Regional Transit Dialogue 2
Part 2 of the Regional Transit Dialogue is expected to begin in early 2011, depending on the completion date of Part 1 meetings and products, Steering Committee member preferences, and ACOG staff availability.